Wake Me Up When Recession Begins

This is a week we should be celebrating. You’re likely wondering the reason for the celebration. Yesterday – October 17th, 2023 – was an anniversary. To be more specific, it is the one-year anniversary of the recession that Bloomberg said had a 100% probability of happening (screenshot below).

I remember when this article was published. The article made headlines in other media outlets, invoked fear, and I’m certain was a topic of conversation I had with many clients.

Anniversaries present an opportunity for us to reflect on the previous year, and I did. Allow me to share with you what I found.

First and foremost, the US economy was not in a recession at any point in the last year (see my chart below from the US Bureau of Economic Analysis).

The way the Bureau scales this chart makes it difficult to see the exact figures, but US GDP has grown by around 2% each quarter since this article was published.

What about the stock market?

Through October 17, 2023, the S&P 500 index is UP 17.56% since the same time last year. In fact, Bloomberg published this article only days after the US stock market hit its 2022 low and began to reverse some of the losses.

This article made bold claims with an even bolder headline. As an aside, I cannot imagine my friends in our compliance department allowing me to publish something claiming there was 100% probability of an event happening. But more important, there is a lot we can learn from this.

“Be fearful when others are greedy, and be greedy when others are fearful”
- Warren Buffet

There has been no shortage of fear over the last year, and it’s difficult to imagine with current events around the world and an upcoming election this will change anytime soon.

Despite the economy growing - albeit slowly – and the market showing great returns over the last twelve months, my conversations with investors haven’t changed. Worry abounds with little optimism. Investing is like confronting risk in any area of our life. The fear we have in our minds can make the risks feel insurmountable.

“If you can keep your wits about you while all others are losing theirs, and blaming you. The world will be yours and everything in it, what’s more, you’ll be a man, my son”
- Rudyard Kipling

As the world feels more uncertain each day, know that we are paying attention and here if you have questions.

Any opinions are those of Michael Anania and not necessarily those of Raymond James. Expressions of opinion are as of the date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results